We have sent one note on 3rd Aug 2020 on the completion of two years of our Advisory Services. Those of you who are our subscriber from the beginning would know that we do not overload our subscribers with information. We communicate when it is essential and feel a genuine need to do so. What is the need to send another note in a short span of just 3 weeks?
Market View – Aurum Capital, Aug 25, 2020
We have sent one note on 3rd Aug 2020 on the completion of two years of our Advisory
Services. Those of you who are our subscriber from the beginning would know that we do not
overload our subscribers with information. We communicate when it is essential and feel a
genuine need to do so. What is the need to send another note in a short span of just 3 weeks?
We write whenever we feel that subscribers could have reasons to get jittery. We wrote our
last newsletter on 6th Mar 2020 (Read here) when the market was falling with a ferocious pace.
We are now getting queries from the subscribers when the market has gone up at a furious
pace. So we felt a need to bring this newsletter.
Views on market:
Markets have come a long way since the Mar lows. We have seen a K-shaped recovery in the
markets. Like the 2 branches of the K, some sectors have performed and some have
underperformed. We were able to take advantage of this rally by being fully invested and
made some decent investments in sectors which had tailwinds. And which has played out
well. In the others, we have kept an eye on valuations and decided to stay put. Our portfolio
has rebounded 87% from the lows of Mar. Beating all benchmark indices handsomely (see
table below). The key was not to panic and stay invested and ride out the tough time.
We remain optimistic on the long term prospects of equity investing. At the same time, we
will not hesitate to book profits where we see big run-up and risk-reward not in favour. As
you would recall, we have been doing this since inception. For us the most important criteria
are valuations and commensurate risk-reward ratios. Following this philosophy, we recently
booked profits in one company (gain of 91% in just over 3 months).
We do advise caution in the so-called “hot sectors” and advise to keep an eye on valuations
and quality. When investors chase such hot-sectors more often than not they repent it later.
While we are cautious on hot-sectors, we are looking at some contrarian bet(s) from beaten
down sectors where valuations are in our favour.
A note about our performance measurement practices and recommendations:
1) Our model portfolio remains the same as displayed on the screen for all starting from
2) We include all exits to arrive at our performance. We do not remove/hide any stocks
exited by us even if we have booked any losses.
3) We take the weighted average price of the recommendation. We do not and will never
take the lower price of the band while calculating buy. Similarly, we do not and will
not take the upper price of the band while calculating gains for exit. This, we believe,
avoids any bias for artificial gains. It rather reflects performance close to the reality.
We never try to manage our performance. It is as is in black and white and mostly
tilted to benefit the subscribers.
4) We have 15 companies which make 95% of our portfolio. We have a fairly diversified
portfolio and are not sector heavy in any particular sector. We do put in a lot of
thought in designing our portfolio from a risk angle too. 11 recommendations in
Current Recommendation section, are in buy range and 4 are in hold range. A new
subscriber can allocate 70% in the stocks which are in buy range. Please stick to asset
allocation and buy discipline as advised or as per your risk profile.
5) Please always follow our detailed research and subsequent updates on the company
provided under Current Recommendation section.
6) If you have any questions then you can raise them in Investor Forum section for paid
subscribers. These are always responded by the founder and not outsourced to any
7) If your WhatsApp number is not updated with us then please let’s know.
We continue to be committed to serving you while being a part of your journey for financial
freedom while doing so we will remain transparent.
We are thankful to each one of you for your continued support and confidence in us.
Investment Advisors Department, Aurum Capital
SEBI registration No: INA000011024
The founders’ contribution to equity investing is chronicled here.
(These are not recommendations)